Interim Budget 2019 – Highlights

The budget presented by Piyush Goyal is not a full budget for the Financial Year 2019-20.

It can be changed once the new government is in power after the general elections.

Here are the main take always from his budget:

  1. There is no change in the personal income tax slabs. If your taxable income is upto 5 Lakhs, you need not pay any tax because the exemption under Section 87A is increased to 12,500. With investments in Section 80C options , Standard deduction, Medical insurance premium under Section 80D , Home loan interest etc one can try to reduce the taxable income to 5 Lakhs and escape the tax. But even after all these deduction, if your income is above 5 Lakhs, you are not getting any benefits under 87A. Let’s wait for the full budget after elections.
  2.  For salaried class and pensioners, the standard deduction is increased from 40,000 to 50,000.
  3.  The limit for tax Free gratuity is increased to 30 Lakhs
  4. TDS slab on interest on bank/post office deposits raised from Rs 10,000 to Rs 40,000. This means interest income on bank/post office deposits up to Rs 40,000 will not be subject to TDS. Still these interest is taxable in your hands. You have to declare it and pay tax.
  5. Currently, income tax on notional rent is payable if you have more than one self-occupied house.  From next year,  no tax on the notional rent on the second house.
  6. TDS threshold on rental income raised from Rs 1, 80,000 to Rs 2, 40, 000 lakh per year.
  7. As per the current rules, to reduce the capital gain tax  on sale of property u/s 54, you can invest the gains in one residential house. Now,  you can invest the long term capital gains in two residential houses and reduce tax liability. It is limited upto capital gain of 2 crore .
  8. Small farmers who are having less than 2 Hectares of land will get 6000/- per year into their bank accounts.

Increased rural spending, more money in the hands of middle class, tax soaps to the real estate sector etc can boost the economy if implementation happens in the right spirits.

Please feel free to reply to me , if you have any queries.

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